Article Summary:

As the segment continues to grow and new players enter it, it can be a challenge to clearly define what boutique is. One thing that is clear is the need for original visionaries.

Primary Category: Independent Insights

Secondary Categories: Development, Independents, News

PHOENIX—Differentiating among boutique, lifestyle, soft-brand and independent hotels can be a challenge.

On a panel titled “Individuality: The pros and cons of lifestyle and boutique” at the recent Lodging Conference, Bill Nassikas, president and COO of Westroc Hospitality, which has a collection of “pure independents,” said the differentiator is curating from the ground up instead of being handed a box with all of the elements already in it.

One of the advantages of a boutique hotel is it can act as a social crossroads for a community, he said. Over the last decade, he’s seen that become more of a staple in the overall segment.

“If they don’t mirror the community that they operate in, they’re really missing the target,” he said.

Mitch Patel, president and CEO of Vision Hospitality, said he defines boutique as a smaller property that tells a story, is personalized, unique and intimate. A hard brand that is looking to create a soft brand will pay $75,000 for a box that has every element in it. The same is true for lifestyle, he said.

“These big brand companies … learned that … people are truly looking for unique experiences more than ever,” he said.

Changes in the segment
John Keeling, EVP at Valencia Hotel Group, said the boutique industry started out with visionaries. Those who could transform a night club into a hotel. Now there are “boutique wannabees” who are branded people thinking, “This boutique thing is really catching on; let’s go do some boutiques.”

A problem, he said is that those people often lack vision, and the end result is lackluster. Another setback when brands enter the space are brand standards, which can clog the sense of originality, he said.

“What happens when you standardize originality?” he asked. “Where’s the surprise ... you can’t mass-produce originality. That’s where the brands will always fail.”

Sarah Treadway, president and co-CEO of Denver-based Stout Street Hospitality, said over the last 10 years, she’s seen more new, non-traditional developers entering the boutique space.

“The economy is so good, that everybody pretty much wants to own a hotel and they want to own one that’s a boutique … they don’t want to own one that came out of a box,” she said.

Treadway said this trend has been great for the Denver area, which lacked unique hotels. The non-traditional developers might need a little advice, she said, but “they’re doing a nice job and I like to see that. It gives more variety to what we do and it also makes our clients more aware of the boutique space.”

She said if there’s more boutique hotels in the area, it’s more likely clients will search hotels like hers instead of a traditional big-box brand.

Justifying a boutique hotel
Mary Beth Cutshall, EVP and chief development officer at HVMG, said her company has been doing independents and boutiques for a couple of decades. When developing an independent boutique hotel, she said it’s absolutely important to commit to it and put in the time to make its personality unique.

“You can’t fake that,” she said. “It’s a process, there’s a lot of research that goes into it.”

The right talent on a team is needed to help with research, whether it’s internal talent or external, she said. From a profitability perspective, hoteliers have to know how to manage their margins, she said.

Patel said it’s about opportunity, much like what Vision Hospitality saw with its recently opened Edwin Hotel in Chattanooga, Tennessee. He said the location was perfect for a boutique hotel. He had to get the property re-zoned, and people in the neighborhood didn’t want to see a mainstream, select-service hotel pop up, he said.

He said it was a complex process and required a lot of attention to detail.

“We had 12 hotels under design and construction while doing the Edwin, (and) I spent more time on the Edwin than all of those other hotels combined,” he said.

Advice to developers, owners
Nassikas said above all else, the location is what developers should consider, especially if it has an historical underpinning.

“If you go boutique independent, you’ve got to be sure that where you put your stakes in the ground, it’s something that will withstand the test of time,” he said.

Keeling said as new competition continually enters markets, an indie hotel owner or operator will have protection as long as it’s on a great site and managed well.

As the industry reaches an inflection point, Keeling said he’s not afraid of a downturn. If it’s a great property in a great location, people will stay no matter what, he said.

Cutshall said though people might be looking for a bargain during hard times, their desires for experiences won’t go away.

“I think it’s also generational as well,” she said. “Some of the younger travelers are going to be the future travelers; whether it’s for the next cycle or the one after that, they’re driving this. I think because of that, they (align more) with the boutique experience.”

What’s next for the segment?
Looking ahead to the future, Patel said there’s still a learning curve to the boutique lifestyle segment, and continuing to bring it to new audiences will be key.

Keeling added there will be a compelling need to be an original visionary in this segment.

1 Comment

  • TRS October 25, 2019 10:22 AM Reply

    I think it is best to hire THE BEST CANDIDATES not just because of a certain ethnicity or sexual orientation.

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